Glenn, I think I mentioned Ptvl to you before. I just liked their model and accounting practices better. Plus it was cheaper.
I guess I'll now be a owner in Tsg. I'd better check them out.
Ps
Eeln is interest rate sensitive, even the pimp Kiggen said it.
Glenn, did you see that Granola Bar knows Kiggen? He referred to him as a "Top Notch Professional". Maybe Granola can introduce you.;-)
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NEW YORK, Oct 4 (Reuters) - Travel reservation leader Sabre Holdings Corp. <TSG.N> on Monday unveiled plans to spin off its online travel business, Travelocity.com, and merge it in a deal with Web-based vacation and cruise booker Preview Travel Inc. <PTVL.O> to create the No. 1 Internet-based travel agent.
The combined company, to be known as Travelocity.com, would be publicly traded after approval of the deal by Preview Travel shareholders. It would be 70-percent owned by Sabre and 30-percent owned by Preview Travel shareholders, Sabre said.
Sabre is the travel bookings arm of AMR Corp. <AMR.N>, owner of American Airlines, which holds 82 percent of Sabre.
Following news of the deal, Preview stock soared 41 percent to 25, up 7-3/8 on the day Monday in active Nasdaq market trading. Sabre swelled 5-13/16 to 49-3/16 while AMR rose 3-11/16 to 57-9/16. Both trade on the New York Stock Exchange.
With the value of Preview stock soaring, the implied value of the deal rose to $1.15 billion from around $800 million had the deal closed on Friday. These figures were based on a rough calculation of the current market capitalization of Preview and the 70/30 split between Sabre and Preview shareholders.
Executives of the two companies were quick to argue in a interview following the announcement that, as the soon-to-be online travel market leader, shares of Preview, as a proxy for the future Travelocity.com, should command a premium.
"Since the market values leaders, (we believe) that will help propel the value going forward," Travelocity.com Chief Executive Terrell Jones said, referring to the premium investors have paid for Web leaders like Amazon.com <AMZN.O>, the Internet's No. 1 retailer, and eBay Inc. <EBAY.O>, the top online auctioneer.
Meanwhile, shares of Galileo International Inc. <GLC.N>, which offers a rival reservations system to Sabre's, were off 3 at 35-15/16.
The merger has been approved by the boards of both Sabre and Preview Travel, and is expected to close in first quarter of 2000, following government antitrust approvals, Sabre said. The combined company will be based in Ft. Worth, Texas.
Under the deal, Sabre will contribute the assets of Travelocity.com plus $50 million in cash. Shareholders of San Francisco-based Preview Travel shareholders would exchange their shares on a one-for-one basis for their stake in Travelocity, which would trade under the Nasdaq symbol "TVLY."
The combination would create the world's No. 1 online travel service, 50 percent larger than No. 2-ranked Expedia, Microsoft Corp.'s <MSFT.O> service, and well ahead of No. 3-ranked Priceline.com <PCLN.O>, a Sabre spokeswoman said.
After the deal, Travelocity.com is expected to have more than 17 million members and more than $1 billion in gross ticket sales, Sabre said in a statement, making it one of the top ten U.S. travel agencies, online or off, Sabre said.
Executives declined to say when Travelocity might turn a profit, arguing that the company should be measured based on potential lifetime revenue per subscriber, or the way Wall Street values U.S. cable television operators, and lately, major Internet commerce sites.
Travelocity boasts more than 400 reservation agents, while Preview will have around 150 telephone and Web-service agents by year-end, said Preview Travel Chairman Hornthal, who stands to become vice-chairman in the new Travelocity.com.
Travelocity's ties to Sabre's computer reservations system, which is used by many leading airlines and hotel chains, make it a leader in the transactions-end of the travel business. Preview's strengths lie in vacation and cruise packages, travel reviews based on Fodor's travel guides and other resources, and a library of 90-second tourist destination videos.
Reservation sites have won an early following among busy travelers, who prize the speed and convenience of such services and self-service features like airline seat and road maps, weather reports travel reviews and fare-rate comparisons.
The new Travelocity.com will also benefit from its successor companies' range of partnerships with the Internet's most heavily visited sites. Fully one-third of the combined company's visitors come from links to such partner networks.
Travelocity will contribute its ties to Yahoo! Inc. <YHOO.O>, America Online Inc.'s <AOL.N> Netscape Netcenter and CompuServe, Walt Disney Co.'s <DIS.N> Go and ExciteAtHome Corp. <ATHM.O>. Preview has ties with AOL, Lycos Inc. <LCOS.O>, Gannett Co. Inc.'s <GCI.N> USA Today, and also ExciteAtHome.
On that front, Sabre said the company had agreed to a five-year $200 million contract with AOL <AOL.N> to be the exclusive reservations agent for all travel-related services, extending an existing pact AOL had with Preview.
The extended contract calls for America Online to take a cut of ticket bookings, while Travelocity would receive a share of advertising sales, Travelocity officials said. Travelocity also said it had extended its existing contract with Yahoo and that Yahoo had agreed to invest in the combined Travelocity.
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